Merchant Archive

Pyrocantha wrote, in the thread to be found at: http://forums.station.sony.com/swg/board/message?board.id=Development&message.id=424956&view=by_date_ascending&page=3

"Most of the posts in the threads that are protesting this change do NOT advocate a complete lack of a fee, but rather advocate something less than the 3.2% - and a sales tax, to be paid by the merchant. So, say an item lists for 1000 credits - the buyer would still pay 1000 credits, but the merchant would have the tax deducted from this price."

Just fyi @ 5% total charged if your item sold before 1.5 days of being on your vendor you will end up paying alot more than the proposed cost/1000 per 45 min.

/sigh. Time for some arithmetic. I'm switching fonts here, so I really hope this works.

We will use the following as our basis: A vendor holding 100 items, each priced at 1000 creds. This represents a tailor's assortment of stock, being various items in various colours. We will assume that he sells (1D4 - 1)items per day. Further, we will assume that he immediately replaces any sold item. Info - there are 32 45-minute cycles per day. The first set of columns will represent stock-payment, as proposed. The second set of columns will represent sales tax payment (5%).

Sold Value Exp.P/L Sold Value Exp. P/L

3 3000 3200 -200 3 3000 150 2850

2 2000 3200 -1200 2 2000 100 1900

0 0 3200 -3200 0 0 0 0

0 0 3200 -3200 0 0 0 0

1 1000 3200 -2200 1 1000 50950

1 1000 3200 -2200 1 1000 50 950

3 3000 3200 -200 3 3000 150 2850

As we can see, at the end of a week, the first method (daily payment on stock held)results in expenses of C22,400 on sales of C10,000, with a resulting loss of C12,400. The second method (sales tax) results inexpenses ofC500 on sales of C10,000, with a resulting profit of C9,500.

The tailor for the first set of numbers realizes he must revamp his prices to accomodate this. So, he triples his prices, to get sales of C30,000. The tailor for the second set of numbers also triples his prices(they're price-fixing, yes). We will use the same daily sales for the second week. This is the result:

Sold Value Exp. P/LSold Value Exp. P/L

3 9000 9600 -600 39000 450 8550

2 6000 9600 -3600 2 6000300 5700

0 0 9600 -9600 0 0 0 0

0 0 9600 -9600 0 0 0 0

1 3000 9600 -6600 1 3000 1502850

13000 9600 -6600 13000 1502850

3 9000 9600 -600 3 9000 450 8550

As we can see, at the end ofthe secondweek, the first method (daily payment on stock held)results in expenses of C67,200 on sales of C30,000, with a resulting loss of C37,200. The second method (sales tax) results inexpenses ofC1500 on sales of C30,000, with a resulting profit of C28,500.

Merchants increasing their prices under the pay-for-stock-held system will NOT help them.

If we were to consider the stock-held costs for ONLY the items sold, then the first merchant (first week) would have been paying C32 per item, versus a 5% sales tax of C50 per item, and yes, it's smaller. HOWEVER, the problem isn't with the items sold, it's with the items HELD.

If you increase the items sold to, say, (1D10 - 1) then the first merchant will make a profit, but it won't be as good as the one under the 5% sales tax, or (probably)even under a 10% sales tax. The first merchant must sell at least 4 items every single day in order to make a profit. He cannot afford to have items in stock which do not sell quickly.

Any questions?

On Bria / Naboo.

Thank you Sketh!

One really wonders if the devs have misplaced their calculators on this one. If I am getting charged 100% of the value of my goods held on a vendor over a month period of time it means (as a pure merchant who does not craft the things he sells) that I need to both DOUBLE the price of the goods that I get from my suppliers AND sell ALL items within that month to avoid LOSING money...much less make a profit! If I am forced to double the prices that I buy stuff for how in the world can I POSSIBLY compete with those that simply craft their items and sell them by themselves?

Does the government walk into wallmart every hour and say "Let's see, you have $10,000,000 worth of goods in stock, give us $10,000" ? I don't think so.

I figured that was the case (raising prices doesn't equal profit), so my thought was...why not lower all my prices across the board, and charge a higher entrance fee? It would only work if my customers already trust me to have what they want in stock, but still...

I'd set up two shops: one with items that have a base price between 200-1000cr and one with items that range between 1000-3000cr. The first shop would have an entrance fee of 250 cr, and all items sold there would be priced 199cr lower than my usual price. Second shop would have an entrance fee of 1250, and everything would cost between 1-2001cr. The entrance fee would be a little higher than the discount to account for customers who buy more than one thing...

I wonder how that would work? Wonder if I care enough to find out...*sigh*

You better have **edit** nice stuff to charge 250c entry fee. You're libel just to piss off all new customers and some old. You shouldn't have to do this. This is why we need a tax system instead of this inane /1000 crap.

Excellent post to you both, then.

I was just crunching some numbers concerning the proposed changes coming up, so I visited my three vendors and checked the totals for sale...

Armor vendor- 4 suits of Chitin, 1 Mabari, 1 Bone, total of sale price 81200 cr

Clothes vendor- Various assorted, 9650 cr

Structure Vendor- 1 Medium House, 1 Equipment factory, Various assorted harvestors, 143000 cr

Under the proposed rate, I would pay 7483 credits per day in maintenance for those vendors, not counting my reduction via skill.

Since my vendors have been up I have sold 2 suits of Chitin, some assorted clothing, 3 Personal Flora Harvestors and 1 small Naboo house. From my vendors.

On the Bazaar, I put my not so good Chitin armor up, 2 suits at a time. Every day when I log on, both suits are sold. Cost to place on bazaar; 288 credits for 7 days, though they never make it that long. I realize 32000 cr in profits from my bazaar sales.

Before someone jumps on this by saying I'm charging too much....a medium naboo house takes 19600 resources to build. I pay between 2.5 to 3 credits per resource if I harvest them all myself and am selling the house for 3.5 credits per resource approximately (70000 cr). This holds true nearly across the board. I charge a bit more for the armor because people are willing to pay it. If sales start slacking, I'll drop the price a bit.

I've said it before, I am 6 boxes from Master Merchant, but if this proposed change takes effect I will remove my vendors and sell only through the bazaar on my low ticket items and do the "advertisement" thing on the bazaar and do personal transactions for the high ticket items. I will not hesitate to start surrendering Merchant skills. The profession has been broken for some time and by singleing us out to attempt to reduce their database difficulties (rumor, yes, but I for one believe it to be true) they will make it worthless as a profession.

Only by flat fees on personal vendors, maintenance paid at time of sale (tax), or avendor fee cap (suggested since I always got paid a flat wage, not a percentage commission)will this profession remain worthwhile. If the Dev'swant to clear up their database, the Dev's can limit the number of items listed on each vendor (suggested) but they also need to fix the bug that keeps items that were on a destroyed vendor showing on the regional stockroom. If they show as being their I have to assume they are taking up database space even though I can not retrieve them by any means.

The first post was a good analysis.

However, wouldn't someone who sells 0-3 items a day that are valued at 1k be better served by the bazaar?

I think that it is realistic to expect people to sell much more than 1% of their inventory a day. If you sell 10 items a day then you get 70k in sales compared to 22k in maintenence costs for a profit of 48k. If you triple your prices, you end up with 210k in sales compared to 66k in maintence, or a profit of 144k.

Raising your prices helps if your daily sales are higher than your daily maintenance. Of course this is assuming that you get the same number of sales, which may not be true, but that's a seperate argument

If the average amount of time an item sits on your vendor is 3 days, you are paying around 10% for maintenance.

Reshkan, I - and several merchants in my PA - support several crafters by buying their goods. Often, these are not the best goods available and will stay on our vendors for MUCH longer than 3 days. I'm not doing this to get rich. I'm doing it to support my fellow players. The proposed patch destroys my ability to do this. I cannot afford to lose money hand over fist.

In fact, the proposed change makes it IMPOSSIBLE to calculate the cost of doing business. I/m VERY disappointed the devs came up with such a non-business idea, to say nothing of its disasterous consequences to the profession. I guarantee you will see vendors in back rooms with 1 cheap item on them to get experience while the majority of items get sold player-to-player. Then the devs may well come up with something to nerf THAT instead of implementing something sensible in the first place.

Thank you Sketh, for taking the time to outline what we less mathematically inclined sould only sense with our lekku. =)

People will just go back to ordering directly from the Crafter. Period.
I cannot blame them.

Merchants provided a buffer and a 24 hour sales opportunity for crafted goods. If the Devscompared pure merchant bank holdings to those of crafters, they'd see that we have at most 10% of the net worth.

Merchants are not in need of a money sink, and we simply cannot budget with the proposed maintenance fee. The small house I just bought wholesale for 10k... put it up for say 13k. Depending on how long it takes me to sell it, may cost me 500cr, 1k, 5k.... there is no way we can do this and survive.

The simplest most elegant solutions to the obvious and non-obvious issues:

MONEY SINK:

- Bring back the Miner profession. It will grow out of Artisan Surveying, and at Novice you get ability to run one (1) small harvester and one (1) wind harvester. As you move up you can run additional harvesters of increasing complexity to the maximum of 10.
- Increase maintenance costs on harvesters if needed.

This has the effect of adding a HUGE money sink to any crafter who is not also a miner and makes it less likely that they will also be a Merchant, thereby building meaningful interdependance between these three professions. Yes, one person could conceivably do all three, but they wouldn't be getting any sleep, hehe.

RUMOURED DATABASE CRUNCH:

- Limit the number of items per vendor to 150 from 250. Simple. Make people reach Novice Merchant before they get ANY vendors (Business line can offer Bazaar-related perks instead).

MERCHANT COSTS:

- We all know nothing is free. Right now our NPC vendors are slaves. Only the uncivilized and some Imperials believe in this, heheh. OK, so offer them a commission on all sales, 5 or even *shudders* 10%. At least we can budget this into our costs and pricing.

Sincerely

Bhin'der

Manager, TCON Body & Soul

Serving Wanderhome from Corellia, 5 minutes east of Tyrena -3325, -2625

Excellent post. One observation however..

The figures posted in the original post assume that the sale cost is 100% profit on the item - what about the cost to create the item. ?

I am a Master Merchant, and I make Nothing. I buy from Crafters and re-sell. May markup is approximately 20-30% on the majority of items..

PROPOSED FEES

Now assuming I have 100 1,000 credit items, That is costing me 3,200 Credits per day. For each sale I get 25% (for arguments sake) profit. - This means for each sale I get 250 credits. Therefore to break even I need to sell 3,200/250 = 12.8% of my stock every single day, not factoring in building maintenance, travel costs,and other outgoings.

FIXED SALE FEES

Taking the same figures, and assuming a 5% sales tax -100 1,000 credit items. All that happens in effect is that for each one I sell I only recieve 20% profit in stead of 25% - I Still can make a profit..

Bascially this type of maintenance will kill any pure merchants stone cold dead.. Crafter's who take up merchant as a side CAN survive on this due to the fact they can obtain a better margin of profit on goods they create (at least some crafting professions can). It comes down to what SoE see the vision of Merchant as - Is it a bolt on to crafters, or is it a profession in its own right. ???

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Reshkan wrote:

The first post was a good analysis.

However, wouldn't someone who sells 0-3 items a day that are valued at 1k be better served by the bazaar?

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